Altria Group Inc Earnings - Q3 2025 Analysis & Highlights

Key Takeaways

Altria Group Inc's Q3 2025 earnings call highlighted strong financial performance with adjusted diluted EPS growth, advancements in the smoke-free portfolio, and new pathways for long-term adjacent growth. The company discussed its core tobacco businesses' resilience, progress in smoke-free products, and strategic collaborations.

Key Financial Results

  • Adjusted diluted earnings per share increased 3.6% in the third quarter.
  • Adjusted diluted earnings per share increased 5.9% for the first nine months.
  • The company raised the lower end of its 2025 guidance range.
  • Altria now expects to deliver adjusted diluted EPS in a range of $5.37 to $5.45.
  • The EPS growth represents a growth rate of 3.5% to 5% from a base of $5.19 in 2024.

    • Business Segment Results

  • In the smokable product segment, adjusted operating companies income grew by 0.7% to nearly $3 billion in the third quarter.
  • In the smokable product segment, adjusted operating companies income grew by 2.5% to $8.4 billion for the first nine months.
  • Smokable products segment reported domestic cigarette volumes declined by 8.2% in the third quarter.
  • Smokable products segment reported domestic cigarette volumes declined by 10.6% for the first 9 months.
  • For the third quarter and the nine months, Middleton reported shipment volume increased 2% and 1.1% respectively.
  • In the oral tobacco product segment, adjusted OCI declined by less than 1% in the third quarter.
  • The oral tobacco product segment saw improved profitability through adjusted OCI margin expansion of 2.4 percentage points to 69.2%.
  • For the first 9 months, adjusted OCI increased by 3.3% with adjusted OCI margin expansion of 1.8 percentage points to 69%.
  • Total segment reported shipment volume decreased 9.6% for the third quarter and 5.2% for the first 9 months.

    • Capital Allocation

  • In August, the board increased the regular quarterly dividend by 3.9% to $1.06 per share.
  • The board authorized the expansion of the existing share repurchase program from $1 billion to $2 billion, which now expires on December 31, 2026.
  • The company returned nearly $6 billion to shareholders, including $5.2 billion in dividends and $712 million in share repurchases.

    • Industry Trends and Dynamics

  • Oral nicotine pouches continue to be the primary driver of the estimated 14.5% increase in oral tobacco industry volume over the past 6 months.
  • In the third quarter, nicotine pouches grew to 55.7 share points, an increase of 11.1 share points year-over-year.
  • At the end of the third quarter, the e-vapor category included approximately 21 million vapers, up nearly 2 million versus a year ago.
  • During the same period, disposable vapers increased by an estimated 2.4 million to nearly 15 million.

    • Competitive Landscape

  • Competitor promotional activity was highly elevated during the third quarter, particularly during September, driving incremental growth for nicotine pouches.
  • Despite the competitive landscape, Helix was steady in the third quarter, growing on! reported shipment volume to over 42 million cans, representing an increase of nearly 1% versus the prior year.
  • JUUL initiated litigation in federal court and before the ITC against NJOY, asserting claims of patent infringement based on sales of NJOY Daily and on any other products NJOY may be developing that would infringe JUUL's patents.
  • NJOY initiated litigation against JUUL in federal court and before the ITC asserting claims of patent infringement based on the sale of certain JUUL products.

    • Macroeconomic Environment

  • Many adult smokers continued to face discretionary spending pressures resulting from a variety of macroeconomic headwinds, including the compounding effects of inflation.
  • Consumer spending and purchasing behaviors are being closely monitored.

    • Growth Opportunities and Strategies

  • Helix announced plans to launch on! PLUS, its innovative next generation oral product.
  • Horizon also made important regulatory filings for a joint venture in heated tobacco products.
  • Altria announced a collaboration with KT&G to explore opportunities in international innovative smoke-free products and US non-nicotine products.
  • Helix recently launched on! PLUS in Florida, North Carolina, and Texas.
  • In August, Horizon filed a combined PMTA and MRTPA with the FDA for Ploom and Marlboro heated tobacco sticks.
  • The company is evaluating potential pathways to bring the modified ACE product to market.
  • The FDA launched a pilot program to streamline PMTA reviews for oral nicotine pouches and Helix was notified by the FDA that applications for on! PLUS are included in the program.
  • The company entered into an agreement with KT&G to acquire an ownership interest in Another Snus Factory, the manufacturer of the LOOP nicotine pouch brand.

    • Financial Guidance and Outlook

  • The company expects EPS growth to moderate in the fourth quarter as it laps the lower share count associated with the 2024 accelerated share repurchase program and the benefit of the MSA legal fund expiration.
  • The company is mindful of the challenged state of tobacco consumers and will continue to closely monitor their purchasing behaviors.